Time to Grow: Q&A With Transwestern’s Phillip McCarthy
Transwestern Commercial Services (TCS) has added a structured finance group to its Washington, D.C., office as part of a new strategy to enhance its capital markets business line.
Executive Managing Director Phillip McCarthy, with his partner Keith Foery, co-manage the company’s Mid-Atlantic leadership team that is responsible for the overall strategy, recruitment, business development, and financial performance for the region
As part of the push, the firm has added Andrew Asbill and Trevor Campbell as managing directors to lead the group. The duo, both former JLL execs, will focus on equity and debt placement in the Mid-Atlantic for TCS clients who are looking to solve capital needs.
A 19-year veteran in commercial real estate financial services, Asbill most recently served as senior vice president at JLL and, over the past decade, has been involved in more than $4 billion of sales and capitalizations. Campbell is a 17-year vet of the commercial real estate biz, most recently serving as a vice president in the capital markets group at JLL. Throughout his career, he has represented his clients in more than $5 billion in sales and leasing transactions.
Commercial Observer spoke with TCS’s McCarthy, about the broad strategy TCS has in place to enhance its capital markets business line.
Commercial Observer: Why did TCS decide to add a structured finance group to the D.C. office?
Phillip McCarthy: Just broadly speaking, Transwestern is a high-growth company; we’ve effectively brought in, over the last four years, 30 new brokers into our Mid-Atlantic brokerage operations, so it continues a trend of the growth of that machine.
What’s the strategy going forward?
Our capital market strategy is interesting for a couple of reasons. One, because Transwestern has a unique model with a services company, investment company and development company. Two, the connectivity to both working with the services company and having the Transwestern investment company and development company as potential clients is something interesting to people here and a real opportunity for the structured finance group. Three, we have a very robust, fully integrated capital markets machine in the Mid-Atlantic. Gerry Trainor and Mark Glagola are teamed up on the institutional office and industrial side, so we have that covered. We also have an unbelievable multifamily team that has an incredible track record. The piece we were missing was the structured finance piece, so this is a hand-in-glove match for us.
You’ve added Andrew Asbill and Trevor Campbell to the team. They have worked with some of the most active investors in the Washington, D.C., region, including DSC Partners, JBG Smith and Declaration Partners. Can you talk a little about their responsibilities?
First of all, we’re nutty about culture around here, and these guys are an absolute fabulous cultural match. We’re in a very entrepreneurial business here, so we expect them to do exactly what the rest of our pretty amazing brokerage machine is doing, which is to grow the practice, deliver the capability to our clients and create opportunity for the rest of the machine.
What will be the goals of the group in the next six to 12 months?
I would expect the group to continue to grow. They will be able to support what we’re doing on the investment sales side, both in office/industrial and multifamily, where in the past we were unable to bring this debt-equity component, we can now bring that suite of services to our clients. There’s an unbelievable cross-selling opportunity between 350 people here in the Mid-Atlantic. We have a robust services machine. There’s 25 million square feet of property management.
We also have a very substantial agency leasing machine here in the Mid-Atlantic, and there’s an incredible cross-selling opportunity between the agency leasing machine, the service machine and the expanding capital markets machine. Both Trevor and Andrew will benefit from that.
Why do you believe your structure is successful?
D.C. is a very small community and a very tight-knit real estate community but we at Transwestern feel we are a very different company in a way that’s meaningful to both our own team members and our clients. It’s very interesting we have a great number of people joining us from these ginormous public companies. We believe our structure as a private company is better for both our team members and our customers.
Why are investors attracted to the Mid-Atlantic region?
The U.S. markets are a safe harbor for international dollars, and that’s something that is very apparent. Washington is emerging as a tech market. We used to be a contracting town, but with Amazon moving their second headquarters to the region, that puts us on the map as a tech hub. We have this counter-cyclical ballast with the federal government, but now we have this tech market that’s continuing to grow. It’s definitely a new vertical for us.
Any specific locations where you expect to see a lot of activity?
I would say there are some trends that I think are interesting. Obviously, metro-served locations will continue to rise and people will continue to flock to those areas that are walkable. Especially with the advent of millennials matriculating, getting married and having children, this concept of “hipsturbia” is coming to fruition. This is hipsters moving to the suburbs and that’s something new that the investor community is going to have to start paying attention to. What are those locations and where are those opportunities. Those millennials who were living downtown in apartments, where are they going to go? The magic will be for those investors who can find those locations and get ahead of that. Downtown Bethesda is an example of that.
What’s on your radar as far as investing in the area over the next 12 months?
This challenge around workforce housing and creating better housing solutions for the workforce here in the D.C. area is a trend that’s interesting. There are funds out there now that are trying to do good by their community and also achieve returns where large funds are investing in multifamily communities where they can create an affordable opportunity and also a desirable housing solution for D.C. workforce. To do the right thing and also make a reasonable return along the way on the workforce side.